02 Jan Activism & Alternative Credit Rating Movement
ZIP 47: Ann Rutledge – Activism & Alternative Credit Rating Movement Audio Link...
02 Jan Thank (or Blame) Adam Hartung for this blog
Adam Hartung wrote a great column in Forbes on thinking prospectively. So good, I took it on board to frame a conversation about R&R.- Stop waxing eloquently about what you did last year or quarter. Yesterday has come and gone. Let’s talk about the future.
- Tell me about important trends that are going to impact your business. Is it demographics, aging population, the ecology movement, digitization, regulatory change, organic foods, mobility, mobile payments, nanotechnology, biotechnology…? What are the critical trends that will impact your business going forward?
11 Nov Taylor Swift & Art Finance Experiments
What is a song worth? Who creates the value: the songwriter, the singer, or the "star-maker machinery behind the popular song"? Perhaps all three, but how to divvy up the spoils equitably? Taylor Swift's decision to withdraw from Spotify has become a flashpoint for such questions. In...
20 Oct Chang on Changing Economic Dialogue
Posted at 10:06h
in Credit Spectrum
We can try to change the system, or we can try to change human psychology and behavior. For my money, attempting to change the system by substituting one vision for another is a better way to change the dialogue.
Ha-Joon Chang is a Cambridge economics professor, Guardian columnist and influential critic of capitalism, on a mission to change the dialogue on economics from a"god-given" puritanical framework that rewards status-quo wealth to a social system that can be improved, for the benefit of nearly everyone. His recent critique of the positive spin on austerity in The Guardian captured my attention:
17 Oct Can funding for renewable energy ever be AAA risk?
Twenty years ago, rating agency analysts disagreed on whether non-AAA corporations could issue AAA-rated structured securities. Aircraft finance was the poster child of the debate. "Impossible. Too volatile," corporate analysts reasoned. Structured analysts would retort: "Not even $1 of securities can be funded at AAA?" And, if $1 can be funded at AAA levels, what about $2? $3? $1 MM? This spring, R&R got close to the emerging solar securitization market through committee work coordinated through the U.S. Department of Energy's National Renewable Energy Laboratory (NREL), which is working to promote solar energy and preparing for the imminent (2016) solar tax credit phase-out. In December 2013, NREL's Travis Lowder and Michael Mendelsohn published a white paper, The Potential of Securitization in Solar PV Finance, which argues for securitization as replacement funding. R&R discovered that rating agency bias exists against solar PV lease securitization, similar to corporate. The agencies willing to issue ratings (some are not) are capping the rating at low Investment Grade risk levels. Really? Not $1 of securities backed by energy that continuously self-generates is capable of being rated AAA?10 Jun Thomas Piketty: Le Monstre Sacré
Posted at 11:24h
in Credit Spectrum
Over the last few weeks, much ink has been spilled in an attempt to refute, undermine and marginalize the book “Capital in the 21st Century” by Thomas Piketty, a French economist. In some, unsurprisingly British quarters it has even reached the level of “the lady doth protest too much, methinks.” You cannot convince people of your viewpoint by just silencing the opposition. It’s a safe bet that, had a British economist said the same things or reached similar conclusions, no British institution would have attacked him so publicly. But who knows, perhaps “Le Monde” would have done so with gusto and joie de vivre! It’s clear that the Financial Times is not a proper forum to argue about economic time-series with any seriousness. Although one can find fault with the Mona Lisa, doing so does not take anything away from its value as a work of art.
21 Mar Alibaba’s business model
Two days ago, Business Insider published a good summary of little known facts about Alibaba. Several facts highlight how the mega trade-web dwarfs competitor e-commerce platforms in the U.S. and in China on several critical measures, including employees, registered users, web visits, sales throughput (on track...
18 Nov When an article on subprime goes bad
Posted at 13:06h
in Credit Spectrum
Floyd Norris, chief financial correspondent for the New York Times, gives a disturbingly uninformative account of RMBS and CDO markets in his article, When a Deal Goes Bad, Blame the Ratings, November 14, 2013. Not having done the research to really understand the causes of the credit...
27 Aug Industry wrote provision that undercuts credit-rating overhaul
Posted at 15:48h
in Credit Spectrum
By Greg Gordon | McClatchy Washington Bureau WASHINGTON — Moments before the Senate overwhelmingly passed a bill to overhaul the credit ratings industry seven years ago, Republican and Democratic sponsors took turns touting its promise for ending an entrenched oligopoly. The bill, they said, should break the viselike...
14 May Six FDAs or Six Feds?
Posted at 23:54h
in Credit Spectrum
“Imagine the pharmaceutical industry having six FDAs, all competing to approve drugs,” said Rob Dobilas, who founded Realpoint LLC, the credit-rating company bought by Morningstar Inc. in 2010, referring to the U.S. Food and Drug Administration. “Everyone would be dead.” See Matt Robinson, Bloomberg News, Ratings Shopping Revived. Striking quote,...